Broader markets underperform

After several weeks of outperformance, mid- and small-cap indices lose 0.5% each, underperforming the Sensex

The markets closed the week on a flat note, despite the benchmark indices closing with gains on four of the five trading sessions. The last trading session of the week played spoilsport, wiping off most of the gains, with rate-sensitives leading the decline.

The turnaround followed Reserve Bank of India Governor Raghuram Rajan’s comment on Thursday that inflation was a destructive disease forcing the central bank to keep interest rates high.

The BSE Sensex rose 70 points, or 0.3 per cent, to 21,134, while the Nifty saw a five-point, or 0.08 per cent, gain at 6,267. This was in a week when the benchmark indices hit record closing highs.

In the broader markets, after several weeks of outperformance, the mid- and the small-cap indices lost 0.5 per cent each, underperforming the Sensex.

Concern on high inflation, as well as a strong dollar, exerted pressure on the rupee. On Friday, the rupee closed at 62.66/dollar.

With investors turning cautious, defensive pockets such as health care and fast-moving consumer goods were the top sectoral gainers, up two per cent and 1.5 per cent, respectively. The consumer durables and power indices, the only other indices to end in positive territory, rose 0.3 per cent and 0.2 per cent, respectively.

The public sector undertaking, oil & gas, auto and metal indices fell one-1.5 per cent, while the technology, realty, capital goods and bank indices slipped 0.1-0.5 per cent. The IT index was flat, with a negative bias.

Banking stocks were among the top gainers, with Axis Bank gaining about five per cent, followed by ICICI Bank, HDFC Bank and State Bank of India (up 0.06-two per cent). IT majors TCS, Infosys and Wipro gained one-3.5 per cent during the week. In intra-day trade, Wipro hit a 52-week high after the company projected average revenue of $1,729 million from IT services for this quarter.

Metal stocks also gained—Hindalco rose 2.3 per cent and Sesa Sterlite was up one per cent. Tata Steel fell 0.3 per cent.

During the week, auto stocks fell, with Mahindra & Mahindra down 1.5 per cent, Maruti Suzuki India 0.2 per cent, Hero MotoCorp two per cent and Bajaj Auto 0.1 per cent. Tata Motors, however, gained 0.2 per cent.

In the pharmaceuticals segment, Sun Pharma gained one per cent, while Dr Reddy’s closed on a flat note. Cipla was in the red, down 0.7 per cent.

ITC was down 0.2 per cent, while HUL gained 1.2 per cent.

Two index heavyweights, HDFC and Larsen &Toubro, which declared their third-quarter numbers this week, closed with a gain of 0.5 per cent each.

In the energy space, Reliance Industries and ONGC slipped one per cent each, while Coal India fell 5.5 per cent. BHEL and Tata Power lost three per cent each.

During the week, Ranbaxy Laboratories slumped 17 per cent after the US Food and Drug Administration (US FDA) issued an import alert for the company's facility at Toansa in Punjab, which supplied raw material for products sold in the US.

In the mid-cap space, Torrent Pharma and Aurobindo Pharma rose nine-13 per cent. Dewan Housing (up 12 per cent) was the other major gainer.

Losers included KPIT Technologies (down 12 per cent), which saw a sequential decline in consolidated revenue and net profit for the quarter ended December 2013. Supreme Industries (down 11.5 per cent) was the other major loser.